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August 22, 2013

Raymond James Sees 34% Jump in July AUM

Meanwhile, Charles Schwab reports $8.8 billion in net new assets for the month

CEO Paul Reilly of Raymond James.

Raymond James (RJF) said late Thursday that client assets under management totaled $55 billion as of July 31, a jump of 34.4% over last July and 5.3% over June. This growth outpaced the 25% 12-month and 4.95% July performance of the S&P 500.

Client assets under administration hit $418 billion, up 11.7% from July 2012 and up 3% from June 2013. These growth levels, however, did not keep up with the S&P 500.

Overall, client asset growth was the result of both an increase in the S&P 500 and net inflows in assets, according to the company, which is led by Paul Reilly.

Total securities commissions and fees of $241 million were up 4.4% over last July, but down slightly from that June. Fees and commissions in the Private Client Group, which includes about 6,300 financial advisors, were up in the U.S. but offset by a decrease in Canada.

“Equity Capital Markets had a lackluster July as both underwriting and M&A activity were muted,” the company said in a press release. “Fixed Income had improved trading results as July nearly made up for the June monthly loss. However, commission volumes continued to be challenged. August is showing improvement so far for both of our Capital Markets businesses.”

Outstanding loans at Raymond James Bank totaled $8.7 billion, flat compared with June, though the company says loan demand seems to be increasing.

“Recent declines in the S&P 500 coupled with a traditional seasonal weakness in August may make the latter part of the current month challenging for certain of our businesses,” it noted. “We continue to focus on growth initiatives and our cost structure. We believe our businesses are well positioned to compete in any economic environment.”

Last week, Raymond James said that advisors affiliated with its Investment Advisors Division – its RIA platform – would be able to access a wide range of alternative investments for their clients, starting Sept. 1. The announcement comes on the heels of several enhancements to the firm's RIA platform.

“I am pleased to inform our registered investment advisors they will now have access to the Raymond James Alternative Investment Group,” said Bill Van Law, president of Raymond James IAD, in a statement. “The AIG team of 22 experienced professionals carefully review and select what they believe are high-quality, nontraditional investments to serve the more extensive financial needs of higher-net-worth clients.

Schwab, TD Ameritrade

Charles Schwab (SCHW) and TD Ameritrade (AMTD) released their July trading data recently, as well.

Schwab said its July daily average trades were 498,900, down 3.7% from June, but up 26% from a year ago. Revenue trades decreased 8% sequentially vs. a 6% decline at TD Ameritrade, according to a report by equity analysts Jason Weyeneth, CFA, and Alex Levine of Sterne Agee.

Schwab’s core net new client assets were $8.8 billion, up from $8.4 billion in June (after adjusting for mutual fund clearing outflows). “The July result is tracking well compared to the $24 billion of core net new assets embedded in our 3Q13 estimate…” the analysts wrote in a report.

With solid core net new asset growth and market gains, total client assets rose to $2.122 trillion, $12.2 billion higher than the previous record set in May, they note.

TD Ameritrade’s daily average revenue trades were 373,000 in July, up 12% year over year (but down 6% from June), the analysts say. Its average insured deposit account (IDA) assets grew 0.8% from June to $71.8 billion in July.

Total client assets were $544.2 billion on July 31, up 21% year over year and 4% month over month. “Client asset growth was likely driven by a combination of favorable equity market performance and continued organic growth,” according to the Stern Agee analysts.

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